Can you have a co-signer on a mortgage?

What is a co-signer?

A co-signer is someone who signs a loan and takes legal responsibility for repayment but doesn’t receive its benefits. For example, a co-signer on a mortgage agrees to repay the loan if the primary borrower doesn’t but isn’t listed on the home’s title or granted ownership rights.

The loan impacts the co-signer’s credit in the same way it would if they were the primary borrower. Payments, or lack thereof, affect the co-signer’s credit score, and the monthly payment influences their debt-to-income ratio.

Having a co-signer can improve your chances of getting approved for a mortgage since it lessens the risk for the lender by having someone else agree to pay the loan. It can also help you secure better terms since the co-signer’s income and credit score will be taken into account during the underwriting process.

Pros and cons of having a co-signer

Adding a co-signer can make it easier to qualify for a mortgage, but it also puts another person’s finances and credit on the line.

Benefits of a co-signer

A co-signer can strengthen your application by boosting your qualifying income or improving your credit profile. This added support can help you secure a mortgage with lower interest rates or better terms than you could on your own. Making payments on time also allows you to build or rebuild your credit history.

Drawbacks of a co-signer

Co-signing comes with financial and personal risks. If you miss payments or default, your co-signer becomes legally responsible for the debt, which can damage their credit and strain your relationship. Both parties’ credit scores and debt-to-income ratios are affected until the mortgage is paid off or refinanced.

Once the loan is approved, removing a co-signer isn’t simple. Most lenders will require you to refinance or provide proof that you can now qualify on your own.

Co-signer vs. co-borrower: What’s the difference?

Co-signers are responsible for ensuring the payments on the loan are made but don’t receive the benefit of the loan. A co-signer on a mortgage doesn't have any stake in ownership. They can’t take possession if the primary borrower fails to make a payment.

A co-borrower, on the other hand, does receive the benefits of the loan. A co-borrower is on the title of the property and, thus, is considered a co-owner of the home.

Someone who isn’t living in the home and doesn’t plan to have an ownership stake would typically serve as a co-signer. Co-signers help borrowers qualify by backing the loan without taking title to the property.

Carl Holman, director of marketing at Foundation Mortgage, explained, “A co-signer is essentially a financial backstop. They lend their credit and income strength to the application but don’t have ownership in the property and don’t make payments unless the primary borrower defaults.

“A co-borrower, on the other hand, shares equal responsibility for the mortgage and typically has their name on both the loan and the property title. In practice, co-borrowers are often spouses, partners, or family members buying together. The key difference is ownership and occupancy: Co-borrowers are part of the purchase, while co-signers stand behind the loan without holding property rights.”

Someone who doesn’t live in the home and has no ownership interest is considered a co-signer, while anyone sharing ownership of the home is a co-borrower.

» MORE: Top-rated mortgage lenders

Requirements of a co-signer

The requirements for your co-signer will depend on your lender and your financial situation, such as your credit history and income. Ideally, the co-signer should have the income and credit score to qualify for the loan on their own.

A co-signer can’t help you get approved if you have poor credit, but they can help if your income alone isn’t enough to qualify. Carlos Scarpero, a loan officer with Edge Home Finance, explained, “Unlike car loans, a co-signer on a mortgage cannot make up for bad credit. They are only for adding qualifying income to the file.”

Your co-signer should have a credit score of 620 or higher and a debt-to-income ratio of 43% or lower.

Holman explained the different requirements for the various types of mortgages. He said: “Different loan types have different rules for co-signers. Conventional loans often limit co-signers to immediate family members and apply stricter credit standards.

Pick the right co-signer

Lenders look for co-signers who could qualify on their own. Someone with solid credit, low debt and consistent income can make your mortgage approval much easier.

“FHA loans are more flexible, allowing ‘nonoccupant co-borrowers’ who don’t live in the property, and they can be relatives or even close friends with a documented relationship. VA and USDA loans, by contrast, generally don’t allow nonspousal co-signers because those programs are reserved for specific borrower groups.”

» MORE: How mortgage approval works